BY
Gary Noakes

Lufthansa Group profits fly in record 2017

Lufthansa Group has reported the best financial result in its history after seeing profits soar 70% last year.

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Lufthansa Group profits fly in record 2017

The group, which includes Swiss, Brussels Airlines, Austrian Airlines and budget brand Eurowings, made pre-tax earnings of €3 billion in 2017. Revenue increased 12.4% to €35.6 billion and margins rose almost three percentage points to 8.4%.

The Group said the fruits of a cost-cutting programme had prompted the jump in profits. Its result contrasts with Virgin Atlantic, which reported a loss of £28.4 million last year, blamed on sterling’s weakness, the Caribbean hurricanes and engine problems on its Boeing 787 fleet.

Lufthansa Group’s mainline brands saw adjusted profits rise almost 50% to €2.3 billion with a margin that reached almost 10%. Eurowings achieved a 7.3% margin and saw earnings of around €100 million. Last year saw the collapse of rival German budget carrier Air Berlin, which Lufthansa said was likely to have a positive effect from 2019. Lufthansa paid €900 million for part of the Air Berlin fleet following its demise.

Group chairman and chief executive Carsten Spohr said: “Our endeavors of the past few years are paying off. Our modernization has a sustainable impact. We have achieved the best result in the history of our company - 2017 was a very good year for our customers, our employees and our shareholders.”

Lufthansa expects costs to be reduced by another 1-2% this year and that higher fuel costs of around €700 million will be “largely compensated” by improved operating performance.

“We are lowering our costs where this does not affect the customer, and are simultaneously further investing in our product and service quality,” said Spohr.